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Catman attacks Freddie 2nd Mortgages ...
Freddie Mac's Feckless Foray Into Second Mortgages
By Mark Calabria - June 20, 2024
The Biden administration is currently reviewing a proposal by mortgage giant, Freddie Mac, to begin buying second mortgages. Fannie Mae would be certain to follow. Not only would such be inconsistent with the administration’s legal obligations, but it would also intentionally put the taxpayer and countless families at considerable risk. Freddie’s proposal should be rejected.
In 2008, as Senate staff, I helped create a statutory process for Freddie Mac’s regulator to approve or disapprove new products or activities. The process was not meant to be burdensome but instead transparent. It was also meant to ensure that any new products did not conflict with the safety and soundness of either Freddie, Fannie, or the mortgage finance system.
The current proposal fails on that account. As of Q1 2024, Freddie Mac backs almost $3.5 trillion in mortgages. Yet its net worth, or capital, to absorb losses from those mortgages stands at just over $50 billion. That’s leverage of almost 70 to 1. That’s twice the leverage of Bear Stearns in the quarter before its failure in Spring 2008. Make no mistake, Freddie Mac, today, is dangerously leveraged and does not have the capital on its books to support the risk it is currently taking. Responsible supervision calls for shrinking Freddie’s footprint, not supporting an expansion.
The second mortgage and home equity loan market are already adequately served by existing and far better capitalized, lenders. In fact, commercial banks, the primary lender in this market, are experiencing historically low loan to deposit ratios, indicating significant balance sheet capacity to serve this market. It appears the primary reason for the proposal is to benefit not homeowners but nonbank mortgage lenders. I’m not without sympathy for nonbank mortgage lenders, given the depressed state of their business, but to approve this product is to pass along the losses knowingly and intentionally to the American taxpayer.
Perhaps even more puzzling is that the Biden administration only a few weeks ago asserted that nonbank mortgage companies were a potential risk to our financial system, going as far as to call for a Congressional backstop for such lenders. Many of the risks raised by the administration are real and of concern. Yet, if such risks are real, why also propose an expansion of those risks via a Freddie Mac second mortgage product?
If the real purpose of the proposal is to protect borrowers from churning by mortgage lenders, a concern I share, then I would encourage Freddie Mac, and Fannie Mae, to adopt the net tangible benefit test for refinancings that I developed with then Fannie Mae Board Chair Sheila Bair. The reversal of that policy, after my departure, left borrowers vulnerable to equity stripping.
A major contributor to the 2008 mortgage crisis was the continued stripping of equity from mortgage borrowers via refinancings and second mortgages. These practices left many families owing more on their mortgages than their homes were worth. While Freddie promises this new product would still leave borrowers with sufficient equity, 2008 should remind us that home values can fall fast and far. As we are also clearly passing the peak of home prices this cycle, we should not encourage borrowers to reduce their home equity, their safety net, just as the waters are possibly about to get choppy.
Before the mortgage industry starts counting its profits, from dumping this risk onto the taxpayer, consider that, even if approved, this product would likely end under a new administration. Hopefully, the Biden administration will reject another one of Freddie’s feckless forays.
It's not just, or even largely because of FNMA. He knows the mess this administration is. Ackman could lose everything in this trade and still have a massive and high returning portfolio. Winning this will obviously is icing on the cake.
Still .90 cents too expensive and over priced.. trickle down down down she is.. give her sometime.. price will correct itself
It's NOT a political post; it is the reality of the situation we are in. Of course, Ackman is voting his wallet, but he is a realist as well; there was a R hopeful early in the cycle that Ackman was willing to get behind - he stated it on a podcast, but reality set in that there is NO challenger to T in the R party and Ackman realizes Biden is NOT a viable candidate nor a viable world leader.
Trump and the Republicans at large have been supportive of getting Fannie and Freddie out of conservatorship.
They are pro rule of law.
Ackman is just voting his wallet.
I do not think this is a political post, but if the mods feel that it is, feel free to take it down. Shrug.
Right on brother - good to hear from ya!
8-0 verdict: It is almost a certainty that if the corrupt element controls the outcome of the GSEs they will claim the 8-0 verdict and associated monetary award fully compensates shareholders and they will move on with their plan of some kind of cramdown and capital raise - AGAIN, that is if the corrupt element comes out on top behind the scenes. BUT two elements will make this problematic for them:
1.) Fannie Mae was not a part of that suit
2.) Pershing Squares' large common holdings.
A lot of people bash Ackman for a number of reasons, I'm not here to argue any of those in favor or in his defense. The fact is the presence of a very large shareholder will mean there is a party with very deep pockets who will have the full history of this mess at his disposal and better lawyers to fight it - especially Ackman because he won a case very similar to this that went to bankruptcy and his shareholders made out like bandits.
that's about par for the course here - they claim "off-topic" for a lot of shit that is TOTALLY RELEVANT
great news - quality loans is the difference - RELEASE THE GSEs! https://t.co/92MGB2vSBp
— Cmdr Ron Luhmann (@usnavycmdr) June 20, 2024
Lol who removed "The Man With No Name" an his Amazon is buying JCPenny -Q stock 5/26/20 where he said he could write a book he's been involved in so many bankruptcy litigations. Then in Feb 2021 JCPenny -Q stock delisted like BBBYQ.
Moderators not one red cent ~NORC~ stockprofitter Ace Trader Patswil jeddiemack FOFreddie ? I'm not allowed to dish it back? What if he's lying here?
😁
I’m out here saying f this crazy mess! Been deep fucking value investing this shit since I got in the game. I started buying at 2.20 and all the way to .35 and I ain’t fucking leaving!
You got that right, I'm going to sit on my 3% mortgage forever.
But the government objects to the 8-0 verdict, your honor! It should be thrown out and you rule.
"The narrative was established and they never lifted the boot off the necks of Fannie and Freddie."
The media couldn't find enough hours in the day to report about George Floyd but when it comes to the necks of something far more important (F&F) . . . not a peep in 16 years.
are you talking SCOTUS
8-0 verdicts spoke loud and clear that conservatorship and news violated shareholder contracts under corporation charter.
Had Govt not trashed their reputations with blame for Housing collapse and operated the GSEs with the intention to release- this issue wouldn’t exist.
The narrative was established and they never lifted the boot off the necks of Fannie and Freddie.
They need to change their narrative, admit reform and release them from C-ship.
the parrot is a pest
the worst we have met
it created net worth sweep with a hall of shame
and can even play a little political game
it woke up in the middle of the night
to plot a heist
it finds pleasure in ruining lives
plots a theft with itching hives
it identifies with fellow travelers
it gets paid by bankster vultures
if it finally goes to jail
there will be no bail
Jim Parrott is explicit on attempting to wipe out JPS. $FNMAS $FNMA #fanniegate pic.twitter.com/fwyBKBUArP
— Swamps & Shitholes 🇯🇵🇱🇷🇺🇦🇮🇱 (@AZbroker) August 13, 2023
One GSE govrat out and a new govrat in to continue the cycle of sharing useless chit chat with lots of free rubber chicken luncheons.
Can't wait for the GSE release, the current board members that have done squat for shareholders with not have the luxury of continuing on the board.
They deserve nothing better than a quick dismissal.
FNMA
Remembering the answers is a whole notha ball game.
Already has the questions.
Those are just facts. I don't make the news, I just report it. The GSE's are trapped, that's the bottom line.
Most likely having brain cramps in the process. I have to agree with you on this one lady. Ha
FHFA Announces New Staffing Update - IMMEDIATE RELEASE
06/20/2024
Washington, D.C. – Today, the Federal Housing Finance Agency (FHFA) announced that Antonio White has been named Director of the Office of Congressional Affairs and Communications (OCAC).
The Office of Congressional Affairs and Communications is responsible for the Agency’s public and media relations strategy, stakeholder relations, internal communications, and content management oversight of the FHFA public website, which provides a wide range of information to external stakeholders. OCAC is also responsible for working with members of Congress to respond to inquiries and provide information on the programs and operations of FHFA and its regulated entities. OCAC analyzes legislation, tracks statutory changes, and prepares FHFA officials to testify before Congress.
“Antonio brings an immense depth of experience in communications, corporate and civic outreach, and stakeholder engagement that will be a valuable asset to the FHFA leadership team,” said Director Sandra L. Thompson. “His strategic guidance will be essential as we continue to promote equitable access to affordable and sustainable housing in a safe and sound manner.”
About Antonio White: White’s public affairs experience spans two presidential administrations, philanthropy, and the financial services sector. He served in senior advisory roles at the U.S. Department of the Treasury during both the Obama and Biden Administrations, including most recently as Treasury’s Deputy Assistant Secretary for Community Engagement, where he advised Secretary Yellen and her senior staff on stakeholder communications and directed Treasury’s external affairs strategy during the pandemic recovery. He also held senior communications and government affairs roles at the Gates Foundation and Bank of America, respectively. A native of Cleveland, Ohio, he earned a B.A. from Miami University and an M.A. from Morgan State University. He is a recipient of the Treasury Department’s Distinguished Service Award and was recognized by Fortune Magazine on its 2022 Top 40 Under 40 list.
No, it"s not the President. It's the Congress, since the Treasury chose a 3-option Privatized Housing Finance System revamp for the release from Conservatorship in 2011.
13 years in the making.
Biden release of FnF by end of this month has 0.0001% of happening. He's busy trying to memorize what he has to say for the debate next week...
"@timpagliara believes Biden will take credit for solving affordable housing crisis by recap & release of GSEs."
There it is folks . . . . your laugh for today! LOL!
It’s all executive branch- Biden is not surrounded by experts with the bandwidth to get this done.
This administration is good at spending and give-a-ways. Housing policy not so much
Where’s the boy genius skateboard? Trying to time my purchase right before the announcement of release that is coming in June. Do you remember which day you said it would be in June so Biden could take credit?
all interesting
just announce and EO to suspend for 12 months the Guarantee Fees FNMA collects
note this should drop mortgage rates 10% or a full half point
more to follow in 2025
just do it -- (still do not understand why DJT did not smash BO and NWS and help us -- and now it is JOE that does not see the opportunity)
Companies - Brokerages - have different words for different things
I worked at Dean Witter - Morgan Stanley - and Raymond James
I never used the word accredited as in accredited account ?
dedicated
segregated
enumerated
(qualified - as in qualified for margin or speculation )
but never accredited --- maybe you answer before you see this
If not
what is an accredited account ?
right or wrong
those here for 16 years have lost big and bigger
those advising to hold - SO FAR - have been WRONG
but
I will continue to speculate and wish -- as by now this is less than 1% of my money - and I would love for it to become 5% of my money by going way way way up --- that is the purpose of a crazy speculation
You are not a day of Sunshine!
Just Saying!
We have been dug in with this for over a decade. I figure i might as well stay the course and see if I drown in this Shit Hole.
@timpagliara believes Biden will take credit for solving affordable housing crisis by recap & release of GSEs.
— Hitesh Patel (@HiteshP84901225) June 18, 2024
Tim, any update on admn resolution regarding consent decree? We shareholders have been counting on you for many yrs. Hope to hear from White House before the 1st debate
The FAs hired by Fannie, Freddie would have the expertise to get this done. Unclear what is needed by Exec beyond a greenlight to get it done.
— Joseph Waske (@jwaske3) June 20, 2024
$1.30 a share is Nasty work When she blows it’s gonna be bitter sweet.
I was a lurker for a good 5 years before my first post. It's like Pandora's box. Some days I wish I was just a lurker again...
Sorry... Berkley Insurance Co from Oct. Yes, I know FNMA was not party to it, but FMCC was which is why I was asking.
$Freddie $Mac target price = $2.50
I remember after Buying @ .45 then went to .35 then Buying @ .75 then went lower
people pointed out glad they "waited" but they never follow thru - also Bought a ton
@ .99 - last purchase was FMCC @ $1.33 - my 600,000 share avg price is below $1
Fannie / Freddie previously paid $2/sh dividend & had a share price 0f $60 -$80
they are now LARGER part of U.S. Housing , STRONGER & MORE PROFITABLE
when released - even if they "only pay" 25% of that = .50 Dividend -
that's $300,000 /year in Dividends alone
IF YOU ARE A SHAREHOLDER & LURKER it's time to stop being a peeping Tom - drop in let us know you are out there. This mess is enough of a black box without knowing what kind of shareholder base we have.
GSE MBS Issuance Increases in May, Led by $Freddie ...
-
-
Thursday June 20, 2024 - nbhatia@imfpubs.com
Fannie Mae and Freddie Mac issued $55.41 billion of single-family mortgage-backed securities in May, according to a new Inside The GSEs ranking and analysis. That was up 7.9% from April but issuance in the first five months of the year was off 0.7% from the same period last year.
Freddie saw the bigger monthly increase in MBS output, up 9.4% from April. Business was up 6.3% at Fannie.
PennyMac overtook United Wholesale Mortgage and Rocket Mortgage to become the top GSE seller last month, with $5.75 billion in volume. PennyMac drastically increased its GSE business in May as its Fannie sales increased 66.6% and Freddie volume grew 46.8%.
Meanwhile, combined, the GSEs accounted for 53.8% of total residential MBS issued during the first quarter of 2024. That’s well below the share the GSEs have commanded of the residential MBS market in recent years.
Sure there are. Go to your nearest area rug and look underneath to where they're all being swept.
Mortgage Rates Move Lower -
Freddie Mac - Thu, Jun 20, 2024,
MCLEAN, Va., June 20, 2024 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.87 percent.
“Mortgage rates fell for the third straight week following signs of cooling inflation and market expectations of a future Fed rate cut,” said Sam Khater, Freddie Mac’s Chief Economist. “These lower mortgage rates coupled with the gradually improving housing supply bodes well for the housing market. Aspiring homeowners should remember it’s important to shop around for the best mortgage rate as they can vary widely between lenders.”
News Facts
--- The 30-year FRM averaged 6.87 percent as of June 20, 2024, down from last week when it averaged 6.95 percent. A year ago at this time, the 30-year FRM averaged 6.67 percent.
--- The 15-year FRM averaged 6.13 percent, down from last week when it averaged 6.17 percent. A year ago at this time, the 15-year FRM averaged 6.03 percent.
--- The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. For more information, view our Frequently Asked Questions.
Freddie Mac’s mission is to make home possible for families across the nation. We promote liquidity, stability, affordability and equity in the housing market throughout all economic cycles. Since 1970, we have helped tens of millions of families buy, rent or keep their home. Learn More: Website | Consumers | Twitter | LinkedIn | Facebook | Instagram | YouTube
MEDIA CONTACT:
Chad Wandler
(703) 903-2446
Chad_Wandler@FreddieMac.com
@navycmdr 🚀
Re: None
Monday, June 10, 2024 5:15:16 PM
Post# of 796108
$Boooom ! - $GSE $Shareholders $Reply to Govt Motion ...
Link to 65 page Filing : https://t.co/bkTSLwBxbo
Bullish
BULLISH
There’s no updates at this point in time .
When I sue it will be all of you Ps, shorts and non owners who have been orchestrating take downs for years.
zero basis…
The housing market has been in dire straits since mid 2021, 100% predictable and 100% avoidable. GSE's are red because serious investors know there is no chance for them to exit c-ship and escape the threat of the NWS. Oh, and also because the current action in the courts also demonstrates there's no path there either.
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